HomeStart reduces fixed rates by up to 50 basis points

The new reduced fixed rates on HomeStart home loans and graduate loans are:

• 4.49 per cent p.a. for one year, down 20 basis points
• 3.99 per cent p.a. for two years, down 50 basis points
• 3.99 per cent p.a. for four years, down 50 basis points

For low-deposit loans, the new fixed rates are:

• 5.49 per cent p.a. for one year, down 20 basis points
• 4.99 per cent p.a. for the first year of a two-year fixed rate, down 50 basis points, and 3.99 per cent p.a. for the second year, down 50 basis points
• 4.99 per cent p.a. for the first year of a three-year fixed rate, down 50 basis points, and 3.99 per cent p.a. for the second and third year, down 50 basis points

Variable rates on home loans and graduate loans, low-deposit loans and senior equity loans remain the same at 4.94 per cent p.a., 5.94 per cent p.a., and 5.84 per cent p.a., respectively. 

HomeStart joins a long line of lenders to cut their fixed rates after the official cash rate was decreased to the historic low of 1 per cent. These lenders include Westpac subsidiaries, which reduced fixed rates by up to 140 basis points; Virgin Money by up to 70 basis points; Adelaide Bank by up to 65 basis points; and ME by 40 basis points, among other lenders. 

HomeStart was founded as part of an initiative of the South Australian state government, with the primary purpose of assisting first home buyers (FHBs) by offering low-deposit home loan products.

Many analysts are expecting the recent wave of mortgage rate cuts to further fuel home loan demand from FHBs. 

[Related: Westpac introduces discount for low LVR loans]